Peter Singer in NYT on rationing health care

If the Department of Transportation [followed the principle that it was impossible to put a dollar value on human life] it would exhaust its entire budget on road safety. Fortunately the department sets a limit on how much it is willing to pay to save one human life. In 2008 that limit was $5.8 million. Other government agencies do the same. Last year the Consumer Product Safety Commission considered a proposal to make mattresses less likely to catch fire. Information from the industry suggested that the new standard would cost $343 million to implement, but the Consumer Product Safety Commission calculated that it would save 270 lives a year — and since it valued a human life at around $5 million, that made the new standard a good value. If we are going to have consumer-safety regulation at all, we need some idea of how much safety is worth buying. Like health care bureaucrats, consumer-safety bureaucrats sometimes decide that saving a human life is not worth the expense. Twenty years ago, the National Research Council, an arm of the National Academy of Sciences, examined a proposal for installing seat belts in all school buses. It estimated that doing so would save, on average, one life per year, at a cost of $40 million. After that, support for the proposal faded away. So why is it that those who accept that we put a price on life when it comes to consumer safety refuse to accept it when it comes to health care?

I find this bizarre and confused. …I never had the impression that the argument against government rationing of medical treatment was that you can’t put a price on human life. Of course you can! … The argument against government rationing of medical care is not that life is infinitely valuable, but that government has no legitimate authority to decide how much an individual should be allowed to pay.

Suppose Peter Singer came along and told you that the data show that, on average, Americans value their lives at six million dollars, and that therefore you shouldn’t be able to spend seven million dollars on yourself, since your whole life isn’t even worth that much. Would you be impressed? I hope not!

This might be a standard objection against “rationing” but I don’t see how it is an objection against Singer’s health care proposal. Singer isn’t proposing limits on how much individuals would be allowed to pay. Here’s Singer’s proposal (from the NYT essay):

Rationing public health care limits free choice if private health insurance is prohibited. But many countries combine free national health insurance with optional private insurance. Australia, where I’ve spent most of my life and raised a family, is one. The U.S. could do something similar. This would mean extending Medicare to the entire population, irrespective of age, but without Medicare’s current policy that allows doctors wide latitude in prescribing treatments for eligible patients. Instead, Medicare for All, as we might call it, should refuse to pay where the cost per QALY [i.e. quality-adjusted life year] is extremely high. (On the other hand, Medicare for All would not require more than a token copayment for drugs that are cost-effective.) The extension of Medicare could be financed by a small income-tax levy, for those who pay income tax — in Australia the levy is 1.5 percent of taxable income.

Will might say that Singer’s “Medicare for All” plan wouldlimit how much individuals are able to pay for health insurance, since financing Medicare for All would require raising taxes, which would lower some individuals’ after-tax income, which in turn would lower the amount some individuals have left over to spend on their own health care. But that is different from an outright prohibition on spending more than $X on one’s own health care.

I think Singer shouldn’t have used the word “rationing” to describe his view. When you hear that a good is rationed, you imagine (a) that the good is being divided up and distributed, and (b) that after distribution, there won’t be any of the good left. But Medicare for All doesn’t include (b). The r-word makes Medicare for All seem like a more extreme proposal than it is.

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